Unigestion to Start Credit Fund of Hedge Funds - Bottom-Feeders Gear Up!

Unigestion Holding SA, backed by HSBC Holdings Plc, plans to start a fund to invest in hedge funds focusing on distressed debt as the deepest economic slowdown since World War II leads to rising defaults.

The fund, which will start with $150 million, will invest in “specialized” credit hedge funds “to get the full return of strategies,” said Bernard Sabrier, chairman of the Geneva- based asset manager that oversees about 10.5 billion Swiss francs ($9.2 billion). The fund is set to return at least 20 percent a year.

Hedge funds from Harbinger Capital Partners LLC in New York to 3 Degrees Asset Management Pte in Singapore are starting funds to buy troubled loans and bonds on the cheap. Companies worldwide will default on their debt at a peak rate of 14.6 percent toward the end of this year, Moody’s Investors Service said this month.